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Dec. 2006, pdf, 2.6 MB
The tourism industry as defined for the quantitative survey of enterprises covers the following business activities: Hotels and restaurants (NACE Rev. 1.1 H 55.1 – 55.4), activities of travel agencies and tour operators, tourist assistance activities (I 63.3) as well as recreational, cultural and sporting activities (O 92.33, 92.52 and 92.53).
For the qualitative analysis of this study the sector definition has been extended to include those parts of the transport sector relevant for tourism, especially the aviation industry.
Underpinning the results from previous surveys, tourism is in the vanguard of ICT adoption and e-business in the area of e-marketing and online sales. In this area of customer-facing e-business activities “e-tourism has taken off”. Yet, in a ranking of the 10 sectors studied in 2006, the tourism industry only scores in the middle field regarding the overall use of ICT and e-business. Especially regarding the deployment of ICT infrastructure and the adoption of e-integrated business processes, tourism companies are still lagging behind their counterparts in other industries.
This finding is supported by several indicators: For example, the overall internet connectivity is still somewhat below the average of the 10 sectors surveyed, also the level of usage of ERP (enterprise resource planning) systems is low and e-procurement is significantly less developed than in other sectors.
Overall, customer expectations and market competition are the main drivers of e-business in the tourism sector, while the small size of most companies and the considerable costs associated with acquiring technologies constitute the main barriers for a stronger uptake of e-business.
Considering ICT adoption and size of companies, the most outstanding result is that small tourism companies are more active users of e-business compared to their counterparts from other industries. The gap between big and small companies in using ICT and e-business applications may be relatively smaller than in other industries.
Furthermore, results broken down by different sub-sectors of tourism show that travel agencies and tour operators seem to be the strongest adopters of ICT and e-business, followed by the accommodation sub-sector and – with much lower adoption rates – by the gastronomy sub-sector.
Dis-intermediation and re-intermediation
e-Business processes have led to conflicting, parallel trends which have a profound impact on the role of intermediaries in the tourism market:
Traditional packages offered by tour operators and travel agencies tend to be effective in bundling separate products, but only with limited flexibility. However, the increasing trend towards individualisation of tourism demand requires more flexible, dynamic packages. Despite the fact that technological and organisational barriers for truly dynamic packaging are considerable, a number of players have managed to develop feasible solutions for dynamic packaging.
ICT-related developments in the aviation industry
The aviation industry is one of the sub-sectors of tourism most affected by the development of ICT and the internet. In this context, no-frills airlines are the most striking feature of this market as they rely heavily on e-business solutions.
The ongoing market concentration might lead to the formation of “oligopolies”, where only a few companies dominate the market, and which will eventually lead to reduced competition. Yet, at the same time, competition pressure is expected to rise, as the anticipated growth in turnover in the next few years will be limited, and as ever more price-conscious consumers will put further pressure on tourism enterprises to reduce costs. The following business trends, some of which are contradictory, are expected to shape the market in the near future:
ICT have an influence on the further consolidation of intermediaries, and in particular the market concentration of online intermediaries. This could, in the long term, lead to the formation of strong oligopolies with negative effects on competition. In order to counteract such ICT induced market failure, it is recommended that policy should closely monitor the ongoing market concentration of tourism intermediaries and intervene, if necessary. Regarding policies to promote e-business and ICT adoption the following measures would seem most promising: